Arbitrators have the power under section 57(3)(a) of the Arbitration Act 1996 to “correct an award so as to remove any clerical mistake or error arising from an accidental slip or omission or clarify or remove any ambiguity in the award…”
But what is an accidental slip? Can this be a mistake that is so significant that the decision in the arbitration is reversed?
That is a point that arises from the High Court’s decision in Rees v Earl of Plymouth and Others [2020] EWHC 2986 (Ch), which was an appeal from a Case B arbitration under the Agricultural Holdings Act 1986.
Multiple notices to quit were being examined in the arbitration, where a farm was let to a tenant under two 1986 Act tenancies. The Arbitrator struck down the notice to quit terminating the larger tenancy on the basis that it was a notice to quit part, and did not comply with the break notice provisions in the tenancy. This was an error, caused by the Arbitrator mis-reading the notice to quit. But, founded on that simple error, the tenant succeeded in overcoming the Case B notice to quit on the Arbitrator’s original award, and the landlords failed to get their land back.
As the land was required to be used for a very large housing development, you will appreciate from the landlords’ perspective, that simple error had massive consequences. The same applied to the tenant’s side – the arbitrator’s decision made it clear that if not for the issue over the notice to quit part he would have upheld the notice, so the tenant would have lost his tenancy.
We acted for the landlords, and on seeing the arbitrator’s original award, identified the mistake and invited him to correct it under section 57. It was a straightforward factual error, albeit with significant consequences. The arbitrator accepted his mistake and promptly issued a corrected award. This turned the result on its head – the Case B notice to quit over the larger tenancy was upheld, the landlords were successful and the tenant lost his tenancy.
The tenant appealed, on the basis that an accidental slip within the meaning of section 57 can only be used to correct an error affecting the expression of the tribunal’s thought (ie a typo), and not an accidental slip in the tribunal’s thought process (such as the arbitrator thinking that a notice to quit for the whole of the land was in fact a notice to quit part of the land).
After carefully reviewing the case authorities on this issue the Judge rejected the appeal, finding that the arbitrator was not reviewing his original decision. Instead he was simply correcting the accidental slip that occurred when he overlooked and did not consider the wording of the notice to quit as to the extent of the land to which it related. What followed from there was the 180 degree change in outcome, to the landlords’ benefit.
The fact that those changes can be of massive consequence does not prevent them flowing from an accidental slip by the arbitrator. This was summarised neatly in Axis v M & E UK Limited and Multiplex Construction Europe Limited [2019] EWHC (TCC):
“Once the door had been opened to correct the initial error, then the effect of that decision permitted and indeed, in the interests of justice, required, that any errors consequent on the correction of that gateway error be made”.
Section 57 of the Arbitration Act 1996 is not a backdoor way to appeal an arbitrator’s decision, but where there is clear error made by an arbitrator in an award then it can be a very sensible way of clearing that up. Coupled with a realistic approach from an arbitrator, that can ensure that a justifiable award is made.
Kevin Kennedy, Heather Leach, Maddie Dunn and Genna Hancock have all been acting for the landlords in this case.